On Sunday, Marc Chaikin put on an alert to clients saying there is more upside yet in the S&P 500. In fact, their upside target remains unchanged at 2,450 to 2,500, “which may be exceeded,” the founder of Chaikin Analytics says.
The S&P 500 settled at 2,372 on Friday. Chaikin thinks a 5% to 7% correction is plausible. Some of this could come from a surprise fight by the Republicans regarding the debt ceiling limit later this week. Yes, that debt ceiling will be breached again, as it has for the past decade.
Interest rate hikes are a certainty this week, barring some unforeseen incident somewhere. Strong labor market numbers all suggest the U.S. economy is firing on all four cylinders.
If we were to use Chaikin’s stock platform to pick some winners giving today’s high valuations, we’d come up with these top five names in financial services. (We’ve added YTD performance as well.)
Buy
Arch Capital (ACGL 81,85 -0,14 -0,17%): 10.2%
Citigroup (C 55,36 -0,57 -1,02%): 3.47%
Corning (GLW 32,51 -0,18 -0,55%): 13.56%
Everest Re Group (RE 371,55 -4,49 -1,19%): 8.59%
Renaissance Holdings (RNR 226,41 +1,16 +0,52%): 9.43%
Worth noting, all of these firms had multiples of less than 15 times on average. Citi is trading at 12.9 times.
To give an example of what users of Chaikin’s platform would get, he screened for companies with similar characteristics to Corning. He got five more names that were ranked bullish on his stock screen. One was semiconductor manufacturer Marvell Technology (MRVL 69,13 +0,51 +0,74%) which comes up with a “very bullish Power gauge rating.” Marvell reported a positive earnings surprise on March 2, causing the stock to spike to a new high on Friday.